Proposals to move to a three-year business rate cycle in Scotland will not be possible without a drop in the number appeals, according to an expert group advising the Scottish Government.
The conclusion came in a report on implementation of the 2017 Barclay Review of non-domestic rates, which recommended fundamental reform of the system.
Last year, the Scottish government published Non Domestic Rates (Scotland) Bill, proposing a move to a three-year valuation cycle.
However, the final report by the Barclay Implementation Advisory Group released last week said: “The group and sub-group agreed that it would not be possible to move to a three year revaluation…without reducing the total volume of appeals.”
Figures released this week by the Scottish Government showed that only 41% of appeals against the 2017 revaluation had been resolved at the end of 2018.
However, the report said that there was no agreement on how to address many of the challenges facing the appeals system.
It said that ratepayer representatives opposed the introduction of fees for appeals, while public sector representatives opposed the option of removing the financial incentive for public sector appeals.
In addition, the Barclay Review recommendation that Valuation Appeals Committees should have the power to increase rateable values “would have minimal impact on the volume of appeals”, the report concluded.
There was disagreement within the sub-group considering appeals reform on how proposals to implement reforms in the Barclay Review could be implemented.
“At the time of agreeing this report, both the sub-group and main group have been unable to agree a way forward to address the challenges facing the appeals system,” it said.
On other matters, the report said that there was no consensus on a proposal to support town centres through discretionary powers for councils to apply rates supplements on out-of- town businesses or online retailers.
“The views of ratepayers generally related to concerns that such levies would become commonplace and be used as a source of funding to support general services rather than deliver the policy intent set out by the Barclay Review.”
However, representatives of local authorities disputed suggestions they would abuse the powers and “argued that excessive safeguards would render the policy unattractive to councils and possibly even impracticable”.
In December, finance secretary Derek Mackay said: “while the Barclay review recommended that we explore this possibility as a means of supporting our town centres, in light of proposed UK taxes, I do not believe that it would be right or fair to introduce such a tax at this time.
“We will of course keep this under review.”
Elsewhere, the report said that a new template to standardise bills across Scotland would be consulted on, with a view to providing a final template by the end of November.
Writing on Twitter, business consultant Richard Marsh wrote: “The Barclay Review was brimming full of good ideas.
“By contrast the implementation report published today is underwhelming and risks watering down the good bits.”
Responding to the report, public finance minister Kate Forbes said: “We are making good progress in reforming the business rates system to help us maintain a competitive advantage for Scottish ratepayers and support the Scottish economy.
“I welcome the engagement of all stakeholders in the process so far and hope this will continue as the bill makes its way through Parliament.”
A timetable published by the government alongside the review said the Bill would be introduced to the Scottish Parliament in the Spring, with royal assent expected in advance of the 2020/21 tax year.
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